20 Best Financial Advice for College Graduates

College graduates wearing mortarboard during a graduation ceremony.

In this post, I would like to share financial advice for college graduates.

After graduating from college, I joined the workforce without much knowledge about personal finance.

As time goes by, I learn more and more about personal finance and other financial-related matter.

I find that a lot of important decisions are to be made during our early working years and they are related to finance. If you are able to tackle most of these financial-related matters, it will save you a lot of headaches.

In this post, I put down 20 pieces of financial advice for college graduates with the hope to make your financial road smoother and easier.

If you are a fresh graduate or you know someone who had just graduated, read on or share the 20 tips below.

Financial advice for college graduates

Below are my 20 financial advice for college graduates.

1. Have a monthly budget and stick to it

We all know the importance of having a budget.

Many have it but not many are able to stick to it. Because it takes high discipline to follow a budget. Nevertheless, in managing your finance, having a monthly budget is one of the most important things.

Without a budget, you get lost.

A budget helps you to have a clear current condition of your personal finance. It also helps you to know where exactly your hard-earned money goes.

A budget consists of your income and expenses. So, list down all your sources of income so that you will know how much is your total income for a month. In the same way, list down all your expenses and savings.

Make sure you don’t spend more than you earned, you shall be fine.

2. Save at least 10% of your paycheck

It is important for young graduates to learn to pay themselves first.

How you can do it is to force yourself to save a least 10% of your monthly salary. Over the long run, challenge yourself to increase it to 15% or 20%.

In the beginning, it might seem hard to start, but as you go on, you will find that it gets easier and easier.

3. Start to invest your saving

Money saved from your monthly salary should not be placed in your saving account because the interest earned is very low.

Instead, put the money saved into an investment such as:

fixed deposit placement
unit trust investment

robo-advisor investment
stock investment
gold investment

cryptocurrency

Over the long run, these investment tools will be able to provide a good return on investment.

At the same time, you are learning to be a better future investor too.

4. Buy yourself an insurance

As soon as you got your job and things seem to settle down, get yourself insurance.

Preferable insurance with a medical card, personal accident and probably an investment link plan too.

The reason is that the younger your age, the less you need to pay for your insurance premium. And the earlier you start your investment link policy, the higher the chance for a better investment.

Needless to say, you and your family will be protected in case something undesirable happened.

5. Start your retirement planning

For a young college graduate, retirement seems to be far away. But, trust me, you will not regret it when you start your retirement planning with your first paycheck.

Even though it seems far, it is a place where we all will land.

So, take advantage of the longer time frame you have to grow your retirement fund.

If you start saving early, you might only need to save for certain years and then be able to retire younger.

6. Don’t be too choosy on the job opportunity, experience matters

One thing I noticed about young graduates, some of them are quite choosy about job opportunities. Many aim for high-ranking jobs with high pay.

Keep in mind that you are a newcomer to the workforce and avoid being too choosy on the job opportunity. If you can’t land your dream job, take up an opportunity with the closest match. Then, equip yourself with new knowledge and experience.

Your value will be higher when you have job experience and the possibility to land your dream job will be increased too.

7. Avoid job hopping

Have a strategic plan when looking for job opportunities.

Don’t simply apply for any job and then simply resign in a short period of time. Because frequent job-hopping will make your resume looks ugly.

Instead, apply for those jobs which you think you will be able to stay for at least 2 or 3 years.

Properly planned job employment will bring benefits to you and your employer.

8. Have a financial roadmap for your future

We can’t control everything but Benjamin Franklin said: “if you fail to plan you are planning to fail”.

So, as a college graduate, plan and write down your own financial roadmap.

Some of the important parts of your financial roadmap should consist of:

when and how much is needed to buy your first car?
timeline to buy your first property?
when to get married and start a family?

the amount of money needed for retirement?

Review your financial roadmap from time to time and make changes if necessary.

9. Don’t splurge on your first car

Most likely, college students already have a car when they are studying at college.

And most likely, their parents bought these cars for them. Some work part-time and buy their own car.

It will be wise if you can continue to use these cars into your working years. Wait for a few more years before you buy a new car. Just make sure, you are able to afford the new car.

A better idea would be to buy a good quality used car.

If you still insist on a new car, I suggest you read my sharing on the actual cost of owning a car in Malaysia.

10. Join the workforce first, then start your own business

Unless you are already exposed to the workforce before or during your college years, it is recommended to join the workforce before you start your own business.

You will be thankful for the experience and the networks you made from your employment.

They will make your business venture a lot easier and smoother.

11. Pay your study loan

Your study loan is your debt.

So, paying and settling your study loan should be among your top priority too.

Take a good look at your study loan and have a proper plan to pay on time and pay off as soon as possible.

This is to avoid interest from debts which will cause you to pay more.

Paying your study loan on time will also increase your credit score which will be good for you when you wish to apply for future loans such as housing loans.

12. Take measured risks

Don’t avoid taking risks.

But, carefully study and calculate if it is worth taking the risk. Take time to write down the positive and negative parts of the risk.

Also, don’t make a hasty decision, especially with regard to financial matters. Evaluate the risks properly. If you believe it is worth taking the risk, give yourself a try.

Do your best and the success rate should be higher.

13. Improve financial literacy

There are tonnes and tonnes of financial-related books and articles in the bookstore or on the internet.

So, when you write down your new year resolution, make a decision to improve on a certain financial matter for that particular year. Or, promise yourself to finish one or two good financial books in a year.

Everyone should improve financial literacy, especially young college graduates. Because these group of young adults are going to start to earn money and spend it too.

A wrong financial decision could have a huge impact on their life.

14. Consider side incomes

You should seriously consider taking up part-time jobs or some hobbies which will provide you with supplementary income.

Since you are still young, energetic and have less family commitment, you should really try other things such as starting an online business.

If you have hobbies that can generate income such as blogging or photography, by all means, spend as much time as possible honing your skills.

15. Create an emergency fund

Set aside a chunk of your monthly income under the emergency fund. And promise yourself you can only use this fund for the emergency matter.

Many experts suggest setting aside up to 6 months of your monthly expenses to cover unexpected events such as job loss, large medical bills, or car or house repair.

In this way, you can overcome emergency matters calmly.

16. Manage and utilize your credit card facility

A credit card is essential nowadays.

It can be a very useful financial facility if you use it properly. Unfortunately, many young adults misuse credit cards and fall into bankruptcy.

So, college graduates need to take credit cards carefully and seriously. Such as only using your credit card when you can afford to pay. And clear your credit card balance every month.

Another important reminder is don’t allow yourself to bring the balance to next month because the interest charged is too high. It is not worth it.

17. Utilize autopay facility

Once you joined the workforce, you will have more commitment including utility bills, insurance premiums, car loans, housing loans and other bills.

Take advantage of the autopay facility. It saves you time to do these monthly transactions and ensures prompt payment.

It also prevents late payment charges.

Some corporations even offer a certain amount of rebate if you opt to sign up for their autopay facility.

So, you enjoy further savings.

18. Create a fun fund

Set a portion of your monthly income under the fun fund.

You can use this fun fund for things you enjoy such as travel plans, family outings or buying your dream phone.

After all the hard work, give yourself the treat to motivate yourself to the next level.

Most probably, after you spent your fun fund, you will be eager to save another fun fund.

19. Invest in yourself

You not only need to invest your hard-earned money but you also need to invest in yourself.

There are many ways you can invest in yourself.

Among them, attend courses to learn new skills and improve your knowledge, buy books for self-improvement, invest in good quality attire, join the fitness centre and many others.

When you invest in yourself, you feel good about yourself and become a better version of yourself.

This will greatly improve other areas in your life such as work, relationships and money too.

20. Contribute to parents, family and society

Remember those pocket money your parents gave to you since your primary school days?

Once you are earning your own income, it is a good idea to contribute to your parents.

You can give them a monthly allowance, offer to pay utility bills or support the financial part of a younger sibling.

Don’t forget to contribute to society by donating to your favourite charity organization. Even a small amount of contribution brings hope to someone else.

Needless to say, it makes you feel good and bring a special kind of satisfaction to your life.

Final thoughts

With that, I hope my sharing above on the 20 best financial advice for college graduates is able to provide a guideline for young adults on how to better manage their money.

For some of you, it might be hard to tackle all the 20 pieces of financial advice above at one time. Start with some first, then slowly incorporate more into your daily life.

Trust me, over some time, you will be an expert and looking for more ways to better manage your money.

If you have other financial advice for college graduates which I had missed out on, feel free to leave your comment below.

Let’s learn to make better financial decisions.

photo credit: Nataraj Metz A Sea of Squares via photopin (license)

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